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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
As the world’s largest archipelagic state, Indonesia’s strategic sea routes and growing economy make it a prime destination for maritime trade. However, navigating the regulatory aspects and layers of compliance measures can be challenging for foreign investors.
This guide provides a step-by-step approach and essential considerations to kickstart your own shipping business in Indonesia seamlessly.
Overview of Indonesia’s Shipping Industry
Indonesia’s strategic location between the Indian and Pacific Oceans makes it a vital hub for global trade. The country’s shipping industry is a cornerstone of its economy, connecting its many islands and facilitating international commerce. Key aspects of Indonesia’s maritime landscape include:
1. Cabotage Regulations– Indonesia enforces strict cabotage rules to safeguard and develop the domestic shipping industry. While this presents challenges for foreign entrants, it also creates opportunities for those willing to adapt to local requirements. Under the Shipping/Omnibus Law:
- Only Indonesian-flagged vessels can engage in domestic sea transportation for goods and passengers.
- Foreign-flagged vessels can only conduct certain activities in Indonesian waters if Indonesian-flagged vessels are unavailable or insufficient.
2. Strategic Port Locations– Indonesia boasts several world-class ports serving as hubs for regional and international trade. These ports handle millions of TEUs (Twenty-foot Equivalent Units) annually, making them essential nodes in Indonesia’s logistics network. For example, prime domestic ports such as below are perfect for small-scale domestic operations:
- Tanjung Priok in Jakarta.
- Tanjung Perak in Surabaya.
- Belawan in Medan.
3. Growth Potential– The expansion of e-commerce and logistics sectors is fuelling demand for shipping services in Indonesia. The country’s freight and logistics market is projected to reach $122.2 billion by 2024 because of this, with expectations to reach $178.1 billion by 2030.
Despite the opportunities in Indonesia’s shipping sector, foreign investors often encounter challenges with meeting extensive requirements and documentation procedures. Emerhub can expedite these processes and coordinate all official correspondence on your behalf. You can also leverage our expert localized insights and market feasibility prospects that align with your intended shipping activities in the region.
How to Set Up a Shipping Company in Indonesia
You must comply with specific legal frameworks and obtain key licenses to legally operate in Indonesia. Emerhub can help you navigate the entire process through our comprehensive company registration service:
1. Set Up a Legal Entity
First, you must establish a PT PMA (foreign-owned limited liability company) or partner with a locally-owned PT. Key steps in this process include:
- Business name reservation.
- Deed of establishment.
- Obtaining a Business Identification Number (NIB), which serves as both a registration certificate and import license for your shipping company.
2. Obtain the Necessary Licenses and Permits
Once legally established, you must obtain the correct licenses, permits, and certificates from the issuing authorities before starting any shipments. Emerhub can help you assess all mandatory licensing and certification requirements based on your exact business structure:
| License/Permit | Purpose | Issuing Authority |
| Sea Transportation Business License (SIUPAL) | Authorizes companies to operate shipping services. | Ministry of Transportation |
| General Vessel Certificate | Confirms compliance with safety and tonnage regulations. | Directorate General of Sea Transportation |
| Pollution Prevention Certificate | Ensures adherence to environmental standards. | Ministry of Environment and Forestry |
| Ship Radio Station Certificate | Authorizes communication channels for each vessel. | Ministry of Communication and Information Technology |
3. Build Your Fleet
The next step is to acquire and register your fleet. Foreign investors can either purchase or lease the vessels, depending on their operational strategy and capital capacity.
- Remember that all vessels operating under Indonesian law must be flagged locally– this involves qualifying for safety, tonnage, and environmental standards.
4. Hiring and Training for Staff
For your company to operate efficiently, you must hire qualified crew and management. Indonesian maritime law mandates that crew members meet specific qualifications and adhere to safety protocols. Regular training for staff is also necessary to comply with local and international maritime standards.
Emerhub can provide end-to-end support for setting up your shipping company in Indonesia. We can also provide ongoing payroll services for hiring a local team in Indonesia. If you don’t have employees lined up yet, you can also consider partnering with our sister company, RecruitGo’s international recruitment service to find the right candidates for your operations.
Key Considerations When Starting a Shipping Company in Indonesia
Leveraging Free-Trade Agreements in Indonesia
Indonesia’s participation in several free trade agreements can provide tariff reductions and other trade benefits. These can substantially lower operational costs for shipping companies. Some agreements that can benefit your shipping company include:
- ASEAN Free Trade Area (AFTA)– offers zero tariffs on goods traded among ASEAN member countries, simplifies intra-ASEAN logistics, and enhances regional trade.
- ASEAN-China, Free Trade Area (ACFTA)– provides lower tariffs and simplified customs between ASEAN and China.
- Indonesia-Japan Economic Partnership Agreement (IJEPA)– facilitates trade between Indonesia and Japan with reduced tariffs, investment incentives, and support for industrial collaboration (particularly for high-value exports/imports).
Importer of Record (IOR)– A Faster Alternative for Efficient Shipping
If you are looking to avoid the complexities of registering a local legal entity or are seeking a faster entry into the Indonesian trade market, Emerhub’s Importer of Record (IOR) services offer a comprehensive solution.
With an IOR, you can begin operations immediately by leveraging our existing import licenses and established logistics network. Our IOR services include:
- Obtaining an Importer Identification Number (API), crucial for all imports.
- Preparing all mandatory documentation, including the Bill of Lading, Commercial Invoice, and Packing List.
- Handling duties, taxes, and compliance with ongoing local regulations.
- Managing customs inspections and resolving any issues that arise.
- Operating your logistics chain including goods retrieval and verification, customs reporting and clearance, and pickup/delivery to specified addresses.
Whether you need help setting up your company, acquiring the correct licenses and certificates, or want to fast-track your shipping activities, our experts are ready to assist you with practical solutions. Ready to commence your shipping operations in Indonesia? Fill out the form below and we’ll put you in touch with one of our local experts!
